Compliance

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Ivy Schmerken
Ivy Schmerken
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Stressed Out by Compliance, Reputational Damage & Fines?

Financial services executives are living in a "regulatory pressure cooker." Here's how executives are preparing for the new compliance requirements.
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Stress takes its toll
CEOs are feeling the most stress, but the entire C-suite is under pressure from the mounting compliance demands and costs.
CEOs are feeling the most stress, but the entire C-suite is under pressure from the mounting compliance demands and costs.

Compliance executives will obviously feel the brunt of the stress, but it turns out that stress has spread to executives throughout the C-suite.

In the SunGard survey, 39% of chief compliance officers, along with 34% chief risk officers, report high levels of stress. These executives are responsible for the day-to-day compliance responsibility. The fact that 38% of chief information/technology officers admit to stress may reflect than an overhaul of IT systems is required to cope with regulatory mandates. CFOs are stressed out because they have to make changes to processes and procedures to comply with the new regulations, while CFOs are zapped by the cost of the change programs.

Half the CEO respondents indicated they are experiencing high levels of stress, as well. That is not surprising, since the buck stops here. Some of the reasons for this include the fear of damage to the firm if a failure occurs, the fear of personal damage and liability, and the frustration with having to engage more directly with regulatory issues -- along with the possibility of missing business opportunities.

 

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
6/10/2014 | 1:34:47 PM
Re: Boo hoo
i have to agree here. Although I am not a fan of excess or useless regulations, the public is not longer willing to allow financial firms to self regulate. For years, Wall Street argued that the market would take care of itself and regulations were useless and costly.

As it turned out, self regulation didn't really work out. Now we have gone (probably) to the other extreme. Unfortunately, this is a pill (complex and costly regs) that firms are going to have to swallow for a while.
KBurger
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KBurger,
User Rank: Author
6/4/2014 | 4:18:19 PM
Re: Boo hoo
Ivy, there is no doubt that regulation has become more complex -- some of that is because of politics and turf battles, but some of that is by necessity (things that were unregulated need to be, etc.). Still, it seems kind of disingenous for so many people to be so "caught off guard" by these requirements. I'm not a risk manager or compliance officer and I could have told you the day after Lehman failed that there was going to be more bank regulation. These companies have had plenty of time to plan and budget for this reality.
IvySchmerken
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IvySchmerken,
User Rank: Author
6/4/2014 | 4:10:43 PM
Re: Boo hoo
It's true that banks brought on the regulations themselves. But many are complaining that the regulations are excessive. Someone told me the regulations are vague and it's hard to write rules for systems. There are also numerous regulatory authorities overseeing their activities. In the SunGard survey, some executives said their attention is diverted from their core business and missing opporunities to invest in new markets and products. Compliance has become a huge undertaking.
anon0270366629
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anon0270366629,
User Rank: Apprentice
6/3/2014 | 6:14:12 PM
Reduce the Stress of Compliance in Financial Industry
There are solutions to quickly automate and ensure that your policies and procedures for regulations are managed using best practices in the industry so you can increase efficiency and cover your bases with ease. ConvergePoint is one of these options that keep all of your policies, discussions around policy creation, references, and acknowledgments all in one secure SharePoint central repository for easy creation, approval, distribution, acknowledgment and auditing of your policies and procedures. Anyone interested in automating their efforts to improve their compliance should learn more about this software at http://www.convergepoint.com/policy-management-software.
KBurger
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KBurger,
User Rank: Author
6/3/2014 | 4:39:08 PM
Boo hoo
Why do I feel less than sympathetic? The industry brought this on themselves.
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Stressed Out by Compliance, Reputational Damage & Fines?
Stressed Out by Compliance, Reputational Damage & Fines?
Financial services executives are living in a "regulatory pressure cooker." Here's how executives are preparing for the new compliance requirements.